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Searching for the Concentration-Price Effect in the German Movie Theater Industry

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  • Enrico Böhme

    ()
    (Goethe-Universität Frankfurt a.M.)

  • Christopher Müller

    ()
    (Goethe-Universität Frankfurt a.M.)

Abstract

The empirical relationship between market concentration and prices has been well established for a long time and for numerous industries. Recently itwas confirmed for the USmovie theater industry. This paper investigates, whether such a price-concentration relationship can be found on local cinema markets in Germany as well, focusing on up-to-date mainstream movies. First, we develop a model of monopolistic pricing and estimate its parameters using data of monopoly markets from a new set of German micro data. Then we apply the estimated model to simulate monopoly prices on local markets with two or more operators and compare them to the prices actually observed in these markets. We find no significant difference in admission prices, which puts our study in contrast to the results found on local US markets. Searching for an explanation, we test whether movie theater operators even though being located in the same geographic area, are local monopolists, but find no hint of that, either.

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Bibliographic Info

Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 231 (2011)
Issue (Month): 4 (August)
Pages: 479-493

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Handle: RePEc:jns:jbstat:v:231:y:2011:i:4:p:479-493

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Keywords: Price-concentration study; cinema pricing;

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References

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Cited by:
  1. Feinberg, Robert M., 2014. "Price effects of multimarket contact among movie chains in small US metropolitan areas," Economics Letters, Elsevier, vol. 123(1), pages 6-8.
  2. Marta Zieba & John O'Hagan, 2013. "Demand for Live Orchestral Music – The Case of German Kulturorchester," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 233(2), pages 225-245, March.

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